Question

HELP needs to be handed in at 3:30

The Jameses take out a mortgage on their $470,000 home. The mortgage has an interest rate of 4.6% and is amortized over 30 years by making monthly payments. How much will the James be paying each month on their home mortgage?

Answer 1

$2322.59

Explanation:

Given

mortgage amount=$470,000

Interest rate annually=4.6%

Time=30 years

Monthly payments=?

Formula to apply

`M=(P(1+r)^n*r)/((1+r)^n-1)`

where

M=monthly payment for the mortgage

P=Principal amount =$470,000

i=rate per month=4.6÷12=0.3833%

n=30×12=360

Applying the formula

`M=(P(1+r)^n*r)/((1+r)^n-1) \\\\\\M=(470000(1+0.004)^(360)*0.004 )/((1+0.004)^(360) -1) \\\\\\M=(7452.235)/(3.209) =2322.59`